A Delaware court recently ruled that two insurance companies were not subject to personal jurisdiction in Delaware because it would violate their due process rights. Varsity Brands Holding Co. LLC v. Arch Ins. Co., No. N23C-10-283 MAA CCLD, 2025 WL 552500 (Del. Super. Ct. Feb. 19, 2025). This may be the start of a favorable trend for insurers, who are often sued in Delaware where so many of their insureds are incorporated.
The insureds in this matter were entities involved in sponsoring competitive cheerleading competitions. They were sued in relation to the alleged sexual abuse of minors. The insurers denied coverage based on certain exclusions in their policies, which led to the insureds filing claims for breach of contract and bad faith, among other things, in the Delaware Superior Court.
The dismissed insurers had negotiated and executed policies outside of Delaware, and the underlying claims did not occur in Delaware. The dismissed insurers were licensed to sell insurance and conduct business in Delaware.
Ruling on motions to dismiss based on a lack of personal jurisdiction, the Delaware court held that despite being subject to the Delaware long-arm statute provisions, it would violate the insurers’ due process rights to exercise personal jurisdiction over them. Being authorized to sell or write insurance in Delaware was not enough. An insurer must have minimum contacts with Delaware, and not merely contacts with a resident of Delaware.
About Marissa M. Finley
Marissa Finley is an associate in Tressler's Professional Liability Practice Group. She also works with the Insurance Services Practice Group and the Litigation Practice Group. Marissa focuses her practice on representing insurance companies in complex coverage litigation matters. This includes matters in multiple coverage lines, including professional liability, management liability, commercial general liability, excess exposures and extracontractual liability. Click here to read Marissa's full attorney bio.